News Release

State of Working Illinois studyprovides data for Illinois policy makers

DeKalb, Ill. — Declines in the manufacturing sector, growth in the service sector and the not-as-yet-understood impacts of the global economy are transforming the Illinois economy, altering the employment landscape and reducing the buying power of Illinois households.

Those were among the conclusions of the annual State of Working Illinois report by Northern Illinois University’s Center for Governmental Studies and the NIU Office for Social Policy Research. The university once again partnered with the independent, bipartisan, non-profit Center for Tax and Budget Accountability to create the report.

The report is the latest in a series of comprehensive examinations of the Illinois economy. The project team was assembled three years ago with the goal of providing a definitive set of numbers for use by policy makers and advocacy organizations working to improve the Illinois economy.

“For too long, when people debated the state of the economy in Illinois it turned into an argument over whose numbers were the most reliable,” says Robert Gleeson, director of the Center for Governmental Studies. “We strive to create an independent and accurate assessment of economic trends so that policy makers can spend their time debating what to do about those trends, rather than how to define them.”

It is a task that CGS and the Office for Social Policy Research are uniquely qualified to handle, thanks to a combination of intellectual firepower and an ability to translate complex data into a form that is useful to policy makers.

“Paul Kleppner (director of the OSPR) has spent his career analyzing large datasets in order to understand how important trends affect the lives of working people,” explains Gleeson. “On the other side of the equation, CGS team members Sherrie Taylor and Ben Xu work with policy makers on a daily basis. We understand how to present data in a way that helps them make informed decisions.”

Just as importantly, CGS and OSPR bring to the process reputations for academic integrity. “We aren’t advocating solutions, we just want to ensure that the data are accurate,” says Gleeson.

The 2007 report was presented at a conference in Chicago at the end of November. A series of follow up papers examining various aspects of the findings in greater detail will be released in the summer and fall of 2008.Among the major findings of the 2007 State of Working Illinois report were:

Illinois GDP lagging US. The Gross Domestic Product of the Illinois economy ranked fifth in the U.S., growing at a rate of 3 percent – slower than the national rate of 3.4 percent.

Manufacturing continues long-term decline. High paying manufacturing jobs continue to erode, replaced by lower paying service sector jobs. In 1990 manufacturing accounted for 20 percent of employment in the state, by 2007 that figure had declined to 13 percent. Low-wage service sector jobs now account for nearly 31 percent of all employment in Illinois. Yet the fast-aging manufacturing workforce still presents opportunities for younger workers as older ones retire.

Real earnings declining. When wages are adjusted for inflation, most Illinois workers actually experienced a decline in average weekly earnings from 2001 to 2007. Measured in 2006 dollars, Illinois median household income peaked during 1999-2000 at $54,900. Today that figure has declined about 10 percent to $48,686.

Labor force changing. The number of whites in the work force declined from 82 percent in 1980 to about 71 percent in 2007. Among minorities, the percentage of African Americans in the work force has declined to 12.5 after peaking at 13.5 percent in 2000, while the percentage of Hispanics increased to 11 percent, versus 4.4 percent in 1980.

Importance of education increasing. In 1980, the gap between the median hourly wage for workers with less than a high school diploma and those with a college degree was $7.01. By 2006, that gap had grown to $13.67, a 95 percent increase.

Health insurance disappearing. By 2004-05 nearly 41 percent of Illinois workers lacked employer-provided health insurance. The proportion of Illinois residents with no health insurance at all increased from about 11 percent in 1990 to 14 percent in 2006.